Personal finance Friday

IDFC Mutual Fund floats IDFC Savings Scheme-Series I; Kotak Mahindra MF introduces Kotak FMP 370 Days Series 9; Pramerica MF files offer document with SEBI to launch Pramerica Short Term Floating Rate Fund

IDFC Mutual Fund floats IDFC Savings Scheme-Series I

IDFC Mutual Fund has launched IDFC Savings Scheme-Series I, a close-ended income scheme. The investment objective of the Scheme is to generate income by investing in high quality fixed income securities and generate capital appreciation by investing in equity and equity-related instruments.

The Scheme has duration of 36 months and shall mature on 7 November 2013. The Scheme offers growth and dividend option. During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The NFO opens on 15th October and closes on 29th October. The exit load for the Scheme is nil. The minimum investment amount is Rs5,000. The minimum target amount is Rs1 crore. Ashwin Patni is the fund manager.

Kotak Mahindra MF introduces Kotak FMP 370 Days Series 9

Kotak Mahindra Mutual Fund has launched Kotak FMP 370 Days Series 9, a close-ended income scheme. The investment objective of the Scheme is to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk.

The Scheme offers growth and dividend (payout) option. During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The NFO closes on 18th October. The exit load for the Scheme is nil. The minimum investment amount is Rs5,000. The benchmark index is CRISIL Short Term Bond Index. Deepak Agarwal and Abhishek Bisen are the fund managers. 

Pramerica MF files offer document with SEBI to launch Pramerica Short Term Floating Rate Fund

Pramerica Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch Pramerica Short Term Floating Rate Fund, an open ended income scheme. The investment objective of the Scheme is to generate regular income through investment in a portfolio comprising primarily in short maturity floating rate debt/money market instruments.

The Scheme will invest 65%-100% in floating rate debt securities with residual maturity of less than 91 days. The Scheme shall also invest up to 35% in floating rate debt securities with residual maturity between 91 days and 400 days. The Scheme offers growth and dividend option.

The new fund offer (NFO) price is Rs1,000 per unit. The minimum investment amount is Rs100. The minimum target amount is Rs1 lakh. CRISIL Liquid Fund Index is the Benchmark index. Mahendra Jajoo is the fund manager.
 

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Quick Analysis: Infosys dollar guidance raised; rupee spoils party

Net sales above expectations; profit at the higher end; dollar guidance raised, but rupee guidance stagnant at the upper end due to appreciation

INFOSYS Q2

  • Net sales (INR): Rs69.5 billion (expected range Rs66.1 billion-Rs68.4 billion)
  • Net sales ($): $1.5 billion (expected range $1.44 billion-$1.48 billion)
  •  Net profit: Rs17.4 billion (expected range Rs16.8 billion-Rs17.6 billion)

    Revised guidance:
  • FY11 sales: Rs264.4 billion-Rs268.9 billion (vs. Rs 264.4 billion-Rs268.8 billion earlier) or $5.95 billion-$6 billion (vs. $5.72 billion-$5.81 billion)
  •  FY11 EPS: Rs115-Rs117 (vs. Rs112-Rs117 earlier)

HIGHLIGHTS:

  • December quarter guidance at 4.4% q-o-q dollar revenue growth (in line)
  • FY11 margins could fall 250-260 bps on rupee and tax outgo but EBIT margins were ahead of consensus, up 190bps q-o-q to 30%
  •  The fact that the rupee guidance at the higher end is unchanged was a dampener
  • The raised dollar guidance was higher than expected
  • Special dividend of Rs30 and interim dividend of Rs10, taking the total to Rs40
  • Utilisation higher at 74% (including trainees); added 7,646 employees; Q2 attrition at 4,300 = 17% from 16% last quarter; to hire 11,000 employees in Q3; no significant hike in salaries; FY11 gross hiring target upped to 40,000
  • Said manufacturing has picked up in the US and Europe; Wi-MAX space is still sluggish; UK continues to be stable with a robust pipeline; sees telecom picking up from January
  • Energy, utilities revs up 6.3%, manufacturing up 19% vs. 19.5%, BFSI up 35% vs. 36%, retail up 14.4% vs. 13%
  •  BPO to contribute $400 million-$420 million in FY11
  • Volume growth was 7.2% in Q2, 7.6% in Q1
  • Infosys believes people will take a very short-term view on budgets. Will probably look at a quarterly budget rather than yearly.

In the September quarter, its promoter shareholding was steady at 16%; FII shareholding was marginally down at 35.8% from 36.5% in September 2009 and was steady from 35.8% in June 2010; DII share came down to 7.95% (8.6%, 8.2%). Infosys shares were down after hitting a new high in early trade.

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).
 

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WPI Inflation up at 8.62% in Sept; RBI may hike policy rates

New Delhi: Driven by higher prices of essential items, inflation moved up to 8.62% in September, with experts saying that it will prompt the Reserve Bank of India (RBI) RBI to hike its short-term lending and borrowing rates at next month's policy review, reports PTI.

However, this is the second consecutive month in which the overall inflation has stayed in single-digits. It had remained over 10% for five months till July.

Inflation was 8.51% in August. The July figure, meanwhile, has been revised upwards to 10.31% from provisional estimate of 9.97%.

Besides, food inflation numbers released by the government today showed a marginal increase of 0.13 percentage points to 16.37% for the week ended 2nd October on higher prices of vegetables and milk.

Finance minister Pranab Mukherjee has expressed concern over the rising prices, saying that managing inflation has been one of his biggest challenges.

The overall inflation numbers for September showed prices of primary articles (those found in raw form) - food, non-food articles and minerals - shot up by 17.45% on an annual basis.

Meanwhile, chief economic advisor Kaushik Basu has exuded confidence that inflation will moderate to 6% by March end. "Inflation is virtually holding constant between 8.5%-8.6%... for the first time both the core CPI and the WPI are in single digits...Hopeful of year-end estimate holding at 6%," he told reporters here.

Experts said they expect another 25 basis points hike in short term rates, when RBI comes out with its second quarter policy review on 2nd November.

However, the Reserve Bank governor D Subbarao said in Chandigarh that the central bank would study the inflation data before deciding on further policy actions.

"We will study the de-segregate inflation data in the monetary policy review next month. Inflation figure would be one of the variables to be looked at during the review. I cannot speculate the stance of monetary policy," Mr Subbarao said, when asked about the RBI's further rate hike action.

In a bid to curb consumer spending, the RBI has raised interest rates five times this year to tame rising prices.

HDFC Bank chief economist Abheek Barua said, "We expect another 25 bps hike in repo and reverse repo and after that RBI will pause its rate hike cycle. The rate of rise in prices is coming down gradually

The government has maintained that inflation would come down to about 6% by the end of this fiscal.

Mr Mukherjee has said, "One of my biggest challenges is to control inflation but at the same time, I should not stand in the way of higher growth trajectory...I would not say I have failed. I have been able to reduce it from the peak it reached in December 2009 which it was as high as 20%. Now it has been brought down to 16%."

Meanwhile, the inflation data shows that on an annual basis, vegetables became dearer by 6.03%, fruits by 12.03% and milk by 24% in September. Further cereal prices rose by 6.24% and pulses increased by 5.07%.

Even on month-to-month basis, onion prices surged by 16.21%.

"Food inflation is driving the overall inflation numbers. Although prices of cereals and pulses are easing because of good monsoon, vegetables continue to increase because of seasonal effect," Crisil chief economist D K Joshi said.

This is evident also from the fact that manufactured items did not show as much rise as raw food items. Even food products in manufactured category were up just 2.80% in September. In fact, sugar prices declined by 4.36%.

However, textiles prices are showing upward tendency.

While cotton textiles turned dearer by 14.92% in September year-on-year, man-made textiles prices were up 9.36%. Inflation in prices of manufactured items is easing, even as pressure on food items remain.
 

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